Leerink Says Regenxbio's 30% Drop Is Overreaction
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1d ago
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After Regenxbio disclosed the FDA put a clinical hold on RGX-111 for Hurler syndrome and on the RGX-121 study for Hunter syndrome, Leerink said the roughly 30% premarket selloff in shares underscores the degree of surprise on the news, feeding into the "FDA unpredictability" element of the bear thesis across gene therapy. However, the firm views this pullback as "an overreaction" based on the modest financial contribution of Hunter/Hurler to the fundamental value of shares and views this as a buying opportunity, says the analyst, who has an Outperform rating on Regenxbio shares.
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Analyst Views on RGNX
Wall Street analysts forecast RGNX stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RGNX is 29.71 USD with a low forecast of 19.00 USD and a high forecast of 45.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
7 Buy
0 Hold
0 Sell
Strong Buy
Current: 11.010
Low
19.00
Averages
29.71
High
45.00
Current: 11.010
Low
19.00
Averages
29.71
High
45.00
About RGNX
REGENXBIO Inc. is a clinical-stage biotechnology company seeking to improve lives through the curative potential of gene therapy. The Company has developed a pipeline of gene therapy programs using its proprietary adeno-associated virus (AAV) gene therapy delivery platform (NAV Technology Platform) to address genetic diseases. It is focused on its internal development pipeline in three areas: retinal, neuromuscular, and neurodegenerative diseases. Its investigational AAV therapeutics include ABBV-RGX-314, RGX-202, RGX-121, and RGX-111. It is developing ABBV-RGX-314 in collaboration with AbbVie to treat large patient populations impacted by wet age-related macular degeneration, diabetic retinopathy (DR) and other chronic retinal diseases characterized by loss of vision. It is developing RGX-202 to treat Duchenne muscular dystrophy (Duchenne). The Company is developing RGX-121 to treat Mucopolysaccharidosis type II (MPS II), a progressive, neurodegenerative lysosomal storage disorder.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
REGENXBIO Faces FDA Clinical Hold on Gene Therapy RGX-111
- FDA Clinical Hold: REGENXBIO's gene therapy RGX-111 for Hurler syndrome faces a clinical hold from the FDA due to a tumor case in a trial participant, causing shares to plummet approximately 30% in premarket trading, highlighting market sensitivity to FDA unpredictability.
- Analyst Perspectives: Clear Street analyst Bill Maughan reiterated a ‘Buy’ rating with a $50 price target, noting that the causality between RGX-111 and the tumor remains unestablished, and the patient was asymptomatic, suggesting the market's reaction may be an overreaction.
- Market Reaction: Despite the stock's decline post-announcement, Leerink views the selloff as excessive, believing that the financial impact of Hunter/Hurler syndrome on the company's fundamental value is modest, thus presenting a buying opportunity while maintaining an ‘Outperform’ rating.
- Future Outlook: Stifel also reaffirmed a ‘Buy’ rating with a $45 price target, expecting a delay in FDA approval for RGX-121, yet maintains that the risk-benefit profile for other gene therapies remains favorable.
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REGENXBIO Faces FDA Clinical Hold Investigation
- FDA Clinical Hold: REGENXBIO announced that its Investigational New Drug applications for RGX-111 and RGX-121 were placed on clinical hold by the FDA, indicating significant regulatory challenges that could impact the company's drug development and future market performance.
- Stock Price Decline: Following the FDA's announcement, REGENXBIO's stock price experienced a notable drop, reflecting investor concerns about the company's future prospects, which may lead to decreased investor confidence and affect its ability to raise funds.
- Legal Investigation Initiated: Holzer & Holzer, LLC is investigating whether REGENXBIO complied with federal securities laws, suggesting potential legal risks for the company, and unfavorable findings could further impact shareholder interests.
- Investor Rights Protection: Holzer & Holzer encourages affected investors to contact attorneys, highlighting the importance of protecting investor rights amid legal challenges, which may trigger additional shareholder lawsuits.
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